Home  News Regional News IMF warns of global financial meltdown
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IMF warns of global financial meltdown |
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Sunday, 19 October 2008 |
WASHINGTON DC – The International Monetary Fund (IMF) warned Saturday that the global financial system was on the verge of “systemic meltdown” and said it was ready to lend to countries in dire need of capital due to the current economic crisis.
The pronouncement came a day after leaders of the world’s largest economies unveiled a plan designed to bring stability to financial markets, which have been in flux over the past couple of weeks.
"Intensifying solvency concerns about a number of the largest US-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," IMF chief Dominique Strauss-Kahn said.
Strauss-Khan said that while the move by the G7 group of industrialized nations to take all the necessary steps to unfreeze credit markets was a welcomed development, rich nations had so far failed to restore confidence.
Speaking after talks with the World Bank, United States President George Bush and G7 finance ministers, he urged "exceptional vigilance, coordination and readiness to take bold action" to contain the firestorm sweeping through markets”.
The IMF’s International Monetary and Financial Committee (IMFC) also said using its emergency procedures, “the Fund stands ready to quickly make available substantial resources to help member countries cover financing needs”.
It called for further intensive engagement by the IMF across its 185-country membership to “discuss and develop robust policy responses to the crisis”.
A statement from the Committee said that “collaborative action” between emerging and developing countries was critical to tackle the worst financial crisis in several decades.
"It underscores that the Fund has a critical mandate to foster the multilateral cooperation needed to restore and safeguard international monetary and financial stability."
Several governments across the Caribbean Community (CARICOM) have initiated efforts to assess the impact of the current financial crisis on their economies, with some already establishing teams of financial experts to find ways of averting serious fall out.
In Jamaica, Prime Minister Bruce Golding previously announced that he had assembled a high-powered team of the country’s top financial experts to monitor the global economic crisis and its impact on the local economy. He said those technocrats would play a key role in determining what actions should be taken to deal with the fall out locally.
Guyana’s President Bharrat Jagdeo on Friday said he would meet with various stakeholders, including the private sector, non-governmental organizations and the political opposition to craft various strategies on the way forward.
Stock markets hit a five-year low on Friday, as panic swept through global markets, deepening an already worrying situation.
The financial crisis that first emerged in the US and started spreading like wildfire has been resulted in a series of bankruptcies and forced mergers of banks and other lending institutions.
As a result various governments - including the US, which announced a US$700 billion bailout - have been forced to take radical action to ease the situation, which several analysts say has threatened to descend into an even deeper recession.
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